Unemployment insurance is a joint state-federal program that provides cash benefits to workers who have become unemployed through no fault of their own. Typically, unemployed workers utilizing these benefits can collect about half of their earnings, with the stipulation that they provide proof that they are looking for another job.

But, we are not in typical times. With job losses from sickness and medically- advised quarantine, as well as layoffs in the industries such as hospitality due to the forced closure of restaurants and bars, policy makers at both the state and local levels are taking measures to expand access to unemployment insurance and expedite delivery of funds.

On March 12, the U.S. Department of Labor (DOL) issued a letter clarifying that states have significant flexibility to amend their laws to provide unemployment insurance. (Unemployment Insurance Program Letter No. 10-20 to State Workforce Agencies)

The DOL explains on its website that federal law provides states flexibility to pay benefits when:

1. An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work;
2. An individual is quarantined with the expectation of returning to work after the quarantine is over; and
3. An individual leaves employment due to a risk of exposure or infection or to care for a family member.

State Response

As one of the first steps toward ensuring economic stability in light of COVID-19, several states have implemented measures to expand unemployment insurance. Leading the way are Michigan, California, Ohio, Alabama, Colorado, Delaware, Illinois, Indiana, Massachusetts, Minnesota, and Washington. (National Governors Association “What Steps Have States Taken to Address Coronavirus”, accessed March 17, 2020)

Economic developers should be aware of the common measures being taken to expand these programs, both to advise their small businesses and to offer guidance to their legislators. Unemployment payments, rather than providing a disincentive to work, can cushion local economies, helping to keep small businesses open and larger businesses from laying off more people, due to sustained demand.

Below are some of the common measures being taken as states expand their unemployment programs.

Expedite Processing

Typically, workers who have lost their jobs have to wait a week to file for unemployment benefits. One of the most common measures that states are taking is to waive this requirement in order to deliver funds more quickly. However, as Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development explains in a Twin Cities Business article, employees who are able to take advantage of paid time off programs though their employers may want to tap into these benefits first:

“We know that ... some people have paid leave available to them,” Grove noted. “Those programs will probably pay you more than unemployment insurance.”

Work Search Requirement Waived

Under normal circumstances, one of the key aspects of unemployment insurance is that individuals receiving assistance continue to look for work. However, as industries like hospitality and air travel are impacted by mandatory restrictions or market forces, those workers would not be able to find work in their fields. The DOL also allows for leeway in this requirement, giving states significant flexibility to determine standards for ability to work, availability to work, and suitable work in the context of COVID-19.

Several states are permitting those who are seeking unemployment benefits due to COVID-19 to waive the work search requirement. This includes not only those who have lost employment due to their employers closing, but also those who are quarantined. In Ohio, Lieutenant Governor John Husted explains,

“We will be broadening the current state policy to clarify that individuals that are quarantined by a health professional or by their employer are considered to be unemployed and will not be subject to the requirements to actively seek work, during this period of emergency.”

Changes in Application

Applying for unemployment benefits is usually as simple as filling out a form, either online or on paper. However, in some cases claimants must visit workforce offices in person. Some states have gone a step further to ensure that applying for benefits does not require physically interacting with public workers. In Indiana the Department of Workforce Development (DWD) suspended rules requiring certain unemployment insurance claimants to physically appear at a Work One location to engage in reemployment services for the next four weeks.

Unfortunately, due to the sheer number of unemployment claims, some states’ online unemployment application systems have been overwhelmed, and it may be more efficient to apply by phone or paper form.

Expansion of Eligibility

In light of the need for social distancing and increased medical need, states are expanding the definition of who is eligible for unemployment insurance. Typically, unemployment is not available to those who quit their jobs, but under current circumstances some states are expanding benefits to those who leave their jobs due to infection or to serve as a caretaker.

Michigan is extending unemployment benefits to workers that fit the following descriptions:

• Workers who have an unanticipated family care responsibility, including those who have childcare responsibilities due to school closures, or those who are forced to care for loved ones who become ill.
• Workers who are sick, quarantined, or immunocompromised and who do not have access to paid family and medical leave or are laid off.
• First responders in the public health community who become ill or are quarantined due to exposure to COVID-19.

Unemployment insurance has always been conceived of as a way to support workers that are expected to return to employment. Estimations of how long COVID-19 ramifications will be felt in the economy range from a few months to longer than a year. In light of this unprecedented economic interruption, expansion of unemployment insurance is a necessary step, but ultimately a stopgap measure as new, more sustainable policies are designed.


Website by Accrisoft